On Feb. 24, S&P said it is raising the ratings on Tyson, including the corporate credit rating to 'BBB-' from 'BB+'. S&P also raised the issue-level ratings on Tyson's 10.5% senior unsecured notes due 2014 and 7.35% senior unsecured notes due 2016 to 'BBB-' from 'BB+', and withdrew its '3' recovery ratings on this debt. It is also withdrawing its '4' recovery ratings on all other senior unsecured debt, while keeping the 'BB+' issue-level ratings on this debt unchanged.
“Although US meat marketer and producer Tyson Foods' strengthened operating performance may decline in the coming quarters due to higher commodity costs, we believe its improved credit measures will continue to support a higher rating,” S&P’s announcement stated. “The outlook is stable, reflecting our belief that the company will continue to maintain, on average, credit measures that support the ratings.”
Fitch Ratings upgraded the Issuer Default Rating (IDR) and other debt ratings of Tyson Foods. Long-term IDR has been moved to 'BBB-' from 'BB+'; senior unsecured notes to 'BBB-' from 'BB'; and senior guaranteed unsecured notes to 'BBB-' from 'BB+'. Fitch has also concurrently affirmed the secured bank facility at 'BBB-' and also assigned a new short-term IDR at 'F3'.
“The upgrade in Tyson's ratings to investment grade is due to the company's commitment toward a more conservative capital structure and financial strategy, which is resulting in considerable debt reduction, an extended period of strong cash flow generation, and significantly improved credit metrics,” the Fitch announcement said.